Respond To 2 Classmates S Discussions Evaluating Performance

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Question Description

Discipline:
Accounting

Type of service:
Essay

Spacing:
Double spacing

Paper format:
APA

Number of pages:
1 page

Number of sources:
1 source

Paper detalis:

1. Emily
As our book states, the evaluation methods for various organizationswill depend upon whether we are dealing with a nonprofit, or a forprofit business. (Schneider, 2017, pp. 11.4) The for profit companieswill use evaluation methods such as ROI, EVA, or ROR. However, thosetypes of evaluation methods may not be appropriate for nonprofits whichdon’t always use a traditional method for evaluation.
Within a single company, there may be several accounting methods usedbetween various departments. These methods might include FIFO (first infirst out) for their inventory or LIFO (last in first out). Thedifferences between these two methods can cause issues in accounting.Schneider, 2017 states “The same depreciation method should apply tosimilar classes or categories of assets.” (pp. 11.3)
Managers should be motivated to find goal congruency between theaccounting methods in order to improve the overall ROI of the company.The problems that may arise due to differences in the evaluation methodsinclude the inability to compare expenses such as tools, which is theexample our book gives us. Ultimately, managers must be able to settleon the same criteria they want to use to measure company performance.
Schneider, A. (2017). Managerial Accounting: Decision making for theservice and manufacturing sectors (2nd ed.) [Electronic version].Retrieved from https:// content.ashford.edu/
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2. Tinel.
There are multiple problems that can and will arise when evaluatingvarious divisions of accounting. As we have learned in the previousweeks the account method one chooses to utilize will vary with reasonand preference, and therefore cause a companys overall analysis to notbe as accurate. It is important to carefully consider the accountmethod and determine the right method for the correct most accurateproduct measurement.

A company choosing to use the first-in first out or FIFO method in onedepartment while the other department is using the last-in last outmethod (LIFO) in the another. Choosing to analyze these departmentwould show a huge division in profits with the LIFO seeming to be abetter deal. The use of Residual Income within a division could presentanother possible problem. This accounting method is utilized when oneis trying to focus on a dollar amount vs a ration (Schneider, 2017). Amanager is going to look at the trying to raise the overall dollaramount however, if during this process a comparison arises that includesdollar amounts on different ends of the spectrum (one $50 million andone $2 million) the smaller value is likely t be over looked at thelarger one “should” yield a higher return.

Reference:

Schneider, A. (2017). Managerial Accounting: Decision making for theservice and manufacturing sectors (2nd ed.) [Electronic version].Retrieved from https://content.ashford.edu/

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Evaluating Performance
When comparing various divisions within a company, describe whatproblems can arise from evaluating divisions that have differentaccounting methods, as described in Chapter 11 of your text. Cite threeexamples of accounting methods that could cause divisions’ profits todiffer. Your initial post should be 200-250 words.

Guided Response: Review several of your classmates’ postings. Respond toat least two of your classmates and provide recommendations that extendtheir thinking and may inspire reconsideration of their examples.

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Required Resource
Text
Schneider, A. (2017). Managerial Accounting: Decision making for theservice and manufacturing sectors (2nd ed.) [Electronic version].Retrieved from https://content.ashford.edu/
• Chapter 11: Analysis of Decentralized Operations
• Chapter 12: Costs of Quality and Other Cost Management Issues

Recommended Resource
Multimedia
Lombardo, J. (2018, February 11). The rational decision making model:Steps and purpose in organizations (Links to an external site.) [Videofile]. Retrieved from
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